Japan government gets backing for tax hike

By IVCPOST Staff Reporter

Aug 31, 2013 11:00 AM EDT

A special advisory panel convened by the Japanese government backed a controversial proposal to increase the national sales tax next year. The panel said the tax hike would not endanger the country's economic recovery or undermine business confidence for as long as it would be implemented together with other stimulus.

Japan's Economics Minister Akira Amari told reporters, "Most people on the panel said we should raise the sales tax and that the risks of not doing so outweighed the risks associated with proceeding as scheduled." One of these was University of Tokyo Economist Hiroshi Yoshikawa who said that Japan's economy was now steady and the tax hike should go on as planned.

Prime Minister Shinzo Abe assembled the special panel to give their opinions on the planned tax hike. At present the consumption tax in Japan is 5%. Abe proposed to increase it to 8%. If there are no changes in the plan then the sales tax would reach 10% in October 2015.

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